Asia Pacific Financial Regulatory Update, Fourth Quarter 2019
Technology and data continues to be key focus area for Asia Pacific regulators this quarter. In Japan, we saw a development in cybersecurity where an industry-wide exercise was conducted to address possible attacks during the 2020 Olympics and Paralympics.
Regulators in both Hong Kong SAR and Singapore released important guidance on the responsible use of Artificial Intelligence (AI). The Monetary Authority of Singapore built on its previous guidance and issued a framework (Veritas) to help financial institutions evaluate their AI-driven solutions against the principles of fairness, ethics, accountability and transparency (FEAT). The Monetary Authority of Hong Kong (HKMA) some of its first guidance on the use of AI and focused in on areas like senior management responsibilities, customer protection, and auditability.
In Malaysia, there was guidance on outsourcing. The new requirements also serve to ensure a bank’s continued ability to carry out effective supervisory oversight over financial institutions in relation to their outsourced activities. Third-party management is a key aspect of operational resilience and likely to continue to be an important topic in the future.
Both Australia and South Korea had developments on conduct, consumer protection, and governance. The Australian Securities and Investments Commission released an important report on the oversight of non-financial risks, while a South Korean consumer protection bill was approved by the National Policy Committee.
In India, the Personal Data Privacy Bill passed an important milestone by securing approval from the Union Cabinet for introduction in the current winter session of Parliament. Once the bill is enacted and enforced, protection of personal data and privacy in India will be governed by this new law.
Finally, there were continued developments in IBOR transition across the region. Regulators in Japan and Hong Kong SAR expressed their intention to enhance their monitoring of the financial sector’s preparedness for the transition.